Equity mutual funds in India have witnessed record high capital inflows of Rs. 20,362 crores in the month of August according to data released by the Association of Mutual Funds in India (AMFI). This new record capital inflow into equity funds is attributed to increased participation by retail investors in India as well as due to various steps taken by SEBI to improve investor understanding. This record breaking inflow of capital into mutual funds follows similar trend of inflows that have occurred during the previous 6 months of the current financial year.
As a result of continued capital inflows into equity mutual funds including ELSS, the current asset base of these funds across all fund houses has increased to Rs. 6.44 lakh crore in August. This indicates a 2% growth over the asset base value of Rs. 6.3 lakh crores that was recorded in end of July 2017. Of this total inflow, an estimated Rs. 5000 crores was invested solely through SIPs. After including all capital inflows, the overall assets under management across all fund houses and all types of mutual funds has reached the new high of Rs. 20.6 lakh crores in August end. This shows significant growth over the Rs.19.96 lakh crores level recorded in the previous month.
According to some experts, this sustained inflow into equity mutual fund schemes has been influenced by several factors including an increase in popularity of SIP investments, “dip buying” by investors as well as an overall increase in the number of investors itself. The combination of these factors has led even larger number of investors in small towns across India to invest in equity markets through mutual funds, which has in turn helped sustain high rates of capital inflow over the past few months.